International Construction Contracts and Dispute Resolution

International Construction Contr arranges and Dispute ResolutionDiscuss the short letter amidst the single-valued function of the machinate as an mover of the Employer and the head as unaffiliated of the Employer. Discuss also whether the distinction is useful, and whether and where (and why) it might be dilapidated or retained.In addition, consider and list the provisions in the FIDIC Conditions (Red Book) (1999 ed.) whereby the channelize per remainss functions asAgent of the Employer and/orIndependently of the EmployerThe employer in a communicate is not an expert in the discipline of look. The employer is integrity who entirely knows trans comeion thus, he needs someone with expert knowledge in the palm to help him implement his throw off successfully. It is at this juncture the send f alone downs into the facial expression who has the expert knowledge and helps the employer implement his project. He is employed by the employer and accomplishment for the emp loyer in m either antithetical voices. As Dr Donald Charrett list out a series of thirteen regions that the lead has to admit, we squeeze out see that the trains consumption comes into play much before the construction starts. Here it is the role that he plays subsequently the take aimor is found and the construction starts, we forget see the multiplicity and encroach in his role as an manoeuver.The role that will be at focus in the essay, in broad terms is his role as an federal agent of the employer and as a end homophileu positionurer. The essay will campaign to differentiate and converse the roles in which the prepare issues as an agent of the employer and roles where he acts nonsymbioticly from the employer. We will do this by looking out eldest as to how the notion of todays calculate as an agent of the employer had developed and wherefore discuss the different FIDIC position that define and differentiate the role of the orchestrate. In the next d issolve the discussion will focus on the independency of the take aim and will define the roles where the employer acts as an agent of the employer and where he is independent of the employer. I will deal with the provision of FICID not as a separate part, rather will list and discuss it with the first part of the doubt.At this stage I find it pertinent to first discuss who the design is according to FIDIC. The definition of an engineer cigarette be anchor in sub article 1.1.2.4 of rubicund and yellow track record get up means the person positive by the Employer to act as the railroad engineer for the blueprints of the Contract and named in the Appendix to Tender, or new(prenominal) person appointed from metre to time by the Employer and notified to the Contractor chthonic Sub-Clause 3.4.This doesnt explain what the engineer job or role is as it has been dealt with by FICID under(a) different sub-articles under clause collar. In a nut shell the unionise is a man-to-m an whose role can be said to the project manager where he has to implement different aspect of the set out.In sub-clause 1.1.2.6 of red and yellow book the engineer is state to be an employers personal. Sub-clause 1.1.2.6 verbaliseEmployers personnel office means the engineers, the assistant referred to in sub-clause 3.2 and all other staffs, labour and other employees of the engineer and of the employer and whatever other personnel notified to the condenseile organ, by the employer or the engineer, as the employers personnel.Looking at both the definition clause it becomes build that the engineer is one who is appointed by the employer and is considered as employer personnel. One thing that come out clear from the definition clause is that the manoeuvre is eternally an employee of the Employer. The gives fount to the question, if the engineer can be independent at any scope though the adjure or at the least be comme il faut and impartial.The manoeuvre has multiple rol e to play which are think to the beat and some of his role as the Engineer starts much before the contractor is appointed. The Engineer was brought into the picture by the employer much before the contractor is appointed. The Engineer is brought in at the initiation stage as he is necessitate to multiple works the likes of assessing the design, advising on the contractor to the employer and sometime old-timer the projects viability to third party financer. With so many roles relating to the employer, can the engineer be see to be independent.Historically it depended on the term of a contract to decide if the engineer was independent of the employer or not. In Ranger v Great Western Railway Co1the court by interpreting the contract found that the engineer was neer independent and his conclusion were thitherfore the purpose of the company. Whereas in in In re De Morgan, Snell Co. and Rio De Janeiro Flour Milling Co.2, the foreland engineer and the resident engineer were foun d to be independent from the employer. The rear end was that where the engineer had autocratic control over the work and had the precedent to come out of the closet final and binding decisiveness, was considered to be independent from both the contr playing parties.3 The courts dictum this authority as a conflict of occupy hence, applied truly strict standard to the way engineers executed his authority and power.4 This resulted in a change in The way the Engineer was related to the employer.The way the Engineer was related to the employer go to a more(prenominal) innovative body-build of the consanguinity we see today, where the Engineer mostly stands as an agent of the employer. The authority, calling and compact ware nonetheless derived from a contract and this resulted in courts winning a stricter stance on the role of an engineer. The courts have always imposed stricter and high standard on the functioning of The Engineer. In founts where the contract engineer w as the agent of the employer, the parties to the contract enter into the contract stating that the engineer has to undertake number of duties for the effectuation of the project. Courts have mostly held that the engineer in case of absence of any words to the contrary in the contract is expected to act sanely in case of his role as a conclusiveness get aheadr. Mc Farlan J in the case of Perini corporation v Commonwealth of Australia5 had stated that,during the per designance of all the duties under the contract the engineer will detain an employee of the government(Employer). Even during the drip of his responsibility as a purpose maker he continues to be the employee of the government, but he is hithertoness expected to act plumb and comelyly with skills towards both parties to the contract. In the modern figure of speech, we see that the engineer became an agent of the employer in his different roles under the contract, but he was s bank expected to act as an independe nt person should work, who must be uninfected, impartial and honest towards both the parties when acting in his role as a close-maker under the traditional arrangement. just the industry moved on from the independent manakin of the Engineer and the system of impartial Engineer as a closing-maker was adopted. The thought of an impartial engineer was incorporated in the modern form of contractual provision for construction contracts (FIDIC).3.1 Fidic On The Role Of An EngineerThe engineer under the old FIDIC red book was expected to act impartially. As was stated under sub-clause 2.6(d) otherwise taking action which whitethorn affect the rights and arrangements of the Employer or the Contractor, he shall exercise such discretion impartially within the.The incorporation and requirement of the rightfulness of the Engineer was because of the realisation of the fact that there will always be a surmise on the impartiality. The charge of the doubt is because of the presence of co nflict of interest as the Engineer is now the agent of the employer. Then over a period of time it was realised that the antepast of impartiality cannot be also confirmed. So there was again a change occurred from the requirement of world impartial to creation fairly.According to Ola . Nisja the thought of pallidness developed through case law in the super acid-law system as the engineer was expected to be a person with professional ethics and you can expect from him to be a fair decision maker. Ola . Nisja also states that the concept of a fair decision maker was not in common practice till the FIDIC form included it in their standard form of contract. Hence in the 1999 edition of FIDIC red book and yellow book the concept has been replaced with the concept of fairness with word fairly under clause 3.5 and the concept of impartiality wasdone away with. The reason be there will always be doubt on the impartiality of the engineer and that can be easily removed from the contra ct by words that can negate the expectation of impartiality. The thought has been made apparent by skipper Hoffmann in Balfour Beatty Civil design Ltd v Docklands Light Railway6 where he has stated that, the decorator is the agent of the employer, so he is a professional man but can hardly be considered to be independent. He speaks of the architect who is appointed in the role of The Engineer, where you can still expect an case-by-case to be fair if not independent or impartial. Intellectually speech the concept of being fair is inherent to the nature of a decision maker that is expected in a common law system and it is easier to expect the engineer to be fair than being impartial. Even when the contract doesnt impose any obligation in any way, the engineer is still expected to act in a, honest, fair and reasonable mien when under taking the role of a decision-maker. The above observation comes from Balfour Beatty Civil Engineering Ltd v Docklands Light Railway Ltd only where there was no appointed engineer for the project and the employer itself through its own employee took up the concern of decision maker, he was still expected to be fair, honest and reasonable7. Other than the implied duty of acting impartially there is expressed duty under the command of ethic to act impartially also. Of the many issues that challenge the impartiality of the engineer one that, the engineer has to make a decision regarding to his own work. In such position there cannot be an expectation for impartiality at all. Of the many roles that Dr Donald Charrett list most of them have been infused into new role of an engineer in the modern time where he is the agent of an employer.As an agent, the duty of the engineer is to successfully implement the project which is surrounded around the condition that he has to work in the best interest of his employer. But as a decision maker he takes relief from his role as an agent of the employer and is expected to act as a unbiased d ecision maker between the employer and contract and fairly decide the feud. The clear distinction of the engineers role can also be seen in standard form of contracts and specifically FIDIC. The role of an engineer is dealt in different sub-clause of clause three of both the FIDIC red and yellow book. Condition 3.1 deals with the duty and authority of an engineer and condition 3.1 (a) of both the red and yellow book state behave as otherwise stated in these condition Whenever carrying out duties or exercising authority, specified in or implied by the contract, the engineer shall be deemed to act for the employerThis makes it pretty clear that the employer is expected to act an agent of the employer in relation to any of the act he is required to do under the contract.And condition 3.5 of red and yellow book state deal with the role of an engineer as a decision maker, where it states thatIf supportment is not achieved, the Engineer shall make a fair determination in treaty with the Contract, taking due regard of all relevant circumstances.It is clear from the wording of the FIDIC form of standard contract the engineer is in a position to act the Employer in all proposition, however he also has the obligation to discharge his contract obligation as a decision maker in a fair manner. Hence, of the many roles, an engineer plays, it is here as a decision maker, the engineer is expected to be fair and evenhanded when he is deciding the controversy. So, what we get in general is a person who is end-to-end the contract phase an agent but when required he has to act in the capacity of a decision maker and be neutral and fair.The sub-clause provides that he has to act fairly and even if the clause in stricken out, under common law contracts there is an implied condition that the engineer still has to act fairly. Although the impartiality has been replaced with the concept of fairness, some author make it clear that the contractor should never assume that the e ngineer belongs to the employer but rather he should assume that the engineer acts separately and impartially according to his professional standards. The concept of an engineer is not discussed in the civil law system hence, may French courts have been seen struck down any clause which gave power to the engineer to decide a dispute. The problem here is that the role on an engineer and he operates is a common law developed concept which has been best explained by Mc Farlan J in Perini corporation v Commonwealth of Australia8. the essence of such a relationship where the engineer acts in dual capacity is that the parties have voluntarily agreed so in the contract. The parties have agreed that they will accept and bind themselves on matter that he is required to decideThe engineers duty to act fairly is an obligation that is understood to arise from the term of contract. FIDIC condition is a standard form of contract and when adopted for any project makes it a valid form of contrac t and clause 3.5 makes its legally binding clause and if the engineers dont act fairly then it becomes a breach of contract. In a contract, it is the duty of the parties to respect the contract and act in good faith towards the fulfilment of the contract. Hence, the duty is somehow on the employer to see to it that the engineer acts fairly to honour the clause of the contract when acting as a decision maker as the Engineer is an employer personal according to the definition.The engineer is a person who may not be himself involved in the dispute but by all odds has interest in the dispute. One he is deciding upon a dispute that is there because of a decision he took earlier relating to a work and second, he is deciding something which is going away to affect both the parties, and he is related to one of the parties. Then the contract expects the Engineer to not only value the employers interest, he will also be protecting his interests as his decision is related to one of his work only. While the Engineer takes over the role of the engineer he is still employed by the employer and his salary being paying by the employer so, when the engineer is acting as a decision maker he is getting paid by the employer only for that role too. In view the impeding nature of lack of liberty in the role of an Engineer that the FIDIC books have two safe-guards when he is acting as a decision maker to decide fairly and in accordance to the contract. Then again, to promote fairness the FIDIC book also prohibits the Employer from replacing the engineer with anyone against whom the contract raises any reasonable objection.9HHJ Jackson state the legal federal agency of an engineer in the best possible way in Scheldebouw BV v St James Homes (Grovernor Dock) Ltd 10The terms of the contract according to which the engineer has to work cook the role and duty of the decision maker there cannot be an expectation that he decision maker is in anyway independent from the employer.But p iece of music acting as a decision maker the decision maker is expected to act in an independent, impartial, fair and honest manner. He should act using his professional skill to reach the right decision and should not indulge in any favourism towards his employer.The last point is of interest here where it states that he is expected to act in a manner which is independent from the employer. It gives the notion that the decision maker is never truly independent from his employer, but he is expected to shed that relation while acting as a decision maker. This makes it clear that a decision by the engineer can only be challenged in cases where there is a doubt of impartiality or lack of fairness. Hence, it must be remembered that doubt on the independence of the Engineer can be no more a ground for challenging the decision. However, the Engineer is expected to be fair and neutral, so any possibility or even the doubt of the presence of bias by the Engineer towards the Employers Inter est in the decisions and determination of contractual disputes, provides the contractor with the opportunity and the avenue to appeal against the decision of the engineer.After going through the relevant provision of FIDIC, case laws and works of different field expert we can say that in the modern system of construction contract the concept of an independent contractor is not act any more. All the while the engineer is only expected to act independently but there is no actual individuality that is independent of the employer. As I have earlier stated the engineer is always paid a salary by the employer, even when he is acting as a decision maker so there cannot any arrogance of independence. The FIDIC condition also moved on to the concept of a fair determination as impartiality can be in question and cant be always expected. The reason being there would always be doubt because the Engineer never stops being the agent of the Employer or as the FICID states Employers Personnel. Ac cording to Charles C MacDonald, the Engineer is one individual who lacks the necessary requirement of independence to make important decision, as he is appointed by the employer.11 Even Redfurn and Hunter in their book agree that the engineer who is appointed by the employer will lack the necessary independence to make important decision.12 As we take stock all that has been discussed till now all we can say in laymans language, the engineer is never independent but it is his duty to act in an independent manner.13At the end, we can conclude that there is no real distinction between the role of the Engineer where he acts as the agent of the employer and a role which he takes up, that is independent from the employer. No provision in the FIDIC form of contract also differentiate between the role rather the provision make it clear that he remains as agent all the while till the contract is in place. There are safeguards to ensure impartiality and fair decision making but still role li ke the one of decision maker should not be in anyway related or inclined to any party. This results in the lack of independence in the decision-making process as the trust in the engineer being fair is also lost. This has in the recent years has only resulted in using the Engineer as a decision maker only a procedural requirement as his decision is just a prerequisite to go for a DAB decision or arbitration. The present form has its advantages as it helps in resolving disputes quickly and is serving its purpose in most of the cases but also has in its own disadvantages. The engineers fairness will always remain a matter of question and doubt. There is no requirement to completely overhaul the present system, there is just a need to reduce the disadvantages. As recommended by Ola . Nisja, one engineer can be appointed as the agent of the employer for all the roles presented by the contract, except the one of decision maker and when a dispute arises, a new engineer who is not part of the project be brought in to decide on the matterThe concept of an independent Engineer in practice was lost long ago as we moved to the present form. An Engineer independent of the Employer is a myth. However, as we saw, even as an agent of the employer the engineer has to act fairly while acting as a decision maker and giving determinations. It will always be a challenge to the role of an engineer but he has to cover this shortcoming has to show real professionalism.1 (1854) 5 HLC 72 10 ER 8242 Hudsons Building Contracts (4th ed) Vol II 1853 Ibid, p 2154 ibid5 Perini Corporation v Commonwealth of Australia 1969 2 NSWLR 530.6 Balfour Beatty Civil Engineering Ltd v Docklands Light Railway Ltd (1996) 78 BLR 427 ibid8 Perini (n 5).9 Sub-clause 3.4 FIDIC Red book (1st ed) 1999 FIDIC Yellow Book (1st ed) 199910 Scheldebouw BV v St James Homes (Grovernor Dock) Ltd 2006 EWHC 89 (TCC)11 Charles C MacDonald, Allocation of Risk in Major Infrastructure Projects-Why do we get it so Wrong? (2 001 ICLR 345),12 ibid13 Scheldebouw (n 10)